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Private political funding: IEC says voters will see more transparency and accountability – eventually

epa05452794 A Election Commission worker tears a ballot paper at a voting station during local municipal elections in Meyerton, Midvaal Municipality, south of Johannesburg, South Africa, 03 August 2016. The ruling ANC is expected to loose ground against the opposition parties in a vote which many observers consider the most important since the country's first free and fare elections in 1994. (Photo: EPA/KEVIN SUTHERLAND)

A first glimpse into private political donations could come just after the end of July 2021 through an online quarterly report. It’s a first, but as the Independent Electoral Commission cautioned on Friday, while the new disclosure regimen is a crucial step for transparency, it’s not a panacea.  

 Whether voters will know who donated what to which political party before casting their ballots in the 2021 municipal poll depends on tight timing: on the date for the 2021 local government elections, which must happen sometime between 4 August and 1 November, and how soon the Independent Electoral Commission (IEC) turns the initial private political party donation disclosures into the first quarterly report. 

 IEC vice-chairperson Janet Love on Friday said political parties would be required to submit the required details of private donations by no later than the end of July. “We intend to make these reports available online ahead of the local government elections.”

But if there is a technological glitch or some other such mishap, and the local government elections are held on 4 August, it might not happen. If the municipal poll were set for, say late September, it would be a very different scenario. 

 Right now all this is speculation. What isn’t is that if no one donated more than a cumulative R100,000 to a political party between 1 April 2021 and 30 June 2021, nothing has to be disclosed. That’s because the annual disclosure threshold is R100,000 – whether cash or in kind.

“If the first quarter doesn’t yield any private donations above R100,000 from a single source, there won’t be any disclosure published by the commission to the public,” IEC chief executive for political party funding George Mahlangu confirmed to Daily Maverick.

 And so it may take a bit longer – possibly as long as end September 2022 when the IEC has to submit the private political donations report for the 2021/22 financial year from 1 April 2021 to 31 March 2022, along with its annual report.

But right now, what’s important is that the private party political funding disclosure regimen starts from 1 April 2021 in a significant move to bring transparency – and accountability – to the role of money in politics. On Friday the IEC described this funding disclosure regimen as “one of the most important and significant enhancements to our electoral democracy since 1994”.

The IEC appealed to all – political parties and donors – to not only comply with the letter of the law, but crucially also the spirit of the law that effectively came about due to civil society advocacy. “We hope they embrace the intent and purpose, said IEC chairperson Glen Mashinini, who earlier described the Act as “a strong and positive start” to addressing challenges.

“A word of caution against viewing the PPF as a panacea to all the challenges, dangers and risks associated with funding pol parties and other forms of possible undue influence.” 

The IEC’s political party funding unit is not yet fully capacitated – “It will take time and resources to build full capacity… Until then we remain vulnerable,” according to Love – but the IEC has a disclosure system implementation programme. 

The governing ANC and opposition DA, in a rare agreement, both expressed reservations about the Political Party Funding Act. ANC treasurer-general Paul Mashatile has gone on record over concerns that donors may shy away for having to disclose. The DA has voiced concern about negative consequences for its donors, once names are revealed.

Perhaps ironically, in the wake of the mid-2000s civil society court action to try to compel political parties into donation disclosures, companies started disclosing, at least for some years, what they donated to whom. Broadly speaking, the trend from company books at that time was of proportional donations according to elected public representation.

The 2018 Political Party Funding Act, and its operationalisation from 1 April 2021, took a while to get to.

President Cyril Ramaphosa on 22 January proclaimed the commencement date, ending more than a year in limbo for the act. He had signed it into law in January 2019. Parliament adopted the legislation in June 2018 after the ANC had initiated this legislation in 2017; it’s one of the few Parliament-initiated laws, or committee Bills. The law got stuck because, unusually, the act required a presidential proclamation for commencement.

In that year between the legislation being signed into law and the presidential proclamation of the 1 April 2021 commencement date, grumblings about the disclosure regime, particularly its potential impact of discouraging shy donors, became increasingly vocal. Suggestions were made to amend the act even before it was implemented (Note: such a move would require a new amendment bill to be tabled in the national legislature).

On Friday the regulations for the act were published in the Government Gazette setting out various requirements, including an annual cap of R15-million donation from one source to one political party – and a plethora of forms to be used.

Having stipulated quarterly private funding reports ahead of the yearly report to Parliament, the IEC already put in place, and tested, the online disclosure system – and trained political parties. Awareness and education campaigns are underway, as are briefings of the various political party liaison committees. 

On 1 April 2021, the new allocation system of the representative political parties fund will also be implemented, which governs the public funding of political parties from state coffers. According to the new formula, one third will be allocated on an equitable basis, and two thirds proportionally according to the number of MPs and/or MPLs a political party has at Parliament and provincial legislatures.

Previously the ratio was 10% equitable and 90% proportional allocations. And while smaller political parties may still not be quite satisfied with the new formula, the ANC in particular would be hardest hit.

Under the old 10:90 formula the ANC received the lion’s share of public party political funding, or R88.3-million, according to the most recent available fund annual report for 2018/19. In the same financial year, the DA received R32.2-million and the EFF R2.17-million from the public represented political parties fund.

The new multi-party democracy fund will only become operative once its balance hits R1-million. It distributes money to political parties with elected representatives along the same one-third/two-thirds ratio. Contributions are accepted from anyone except state-owned entities, any organ of state and foreign government; donations suspected to be linked to unlawful activities must also be rejected.

From 1 April 2021 it’s a go. But as the IEC emphasised, political party funding transparency and accountability is a “whole society collective endeavour”. DM

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